Financial difficulties await Inter after Champions League final

Even if they beat Man City in the final to complete the treble, Inter still face a bleak outlook due to the mountain of debt they have to pay.

Inter is the most indebted Italian club, with nearly $1 billion in debt, according to the New York Times . They have lost more than $400 million in the past two years and were fined $5 million by UEFA for tax violations last year. Inter have also been warned they will have to pay a larger fine - about $25 million - if they do not stabilize their finances.

In 2021, Suning Group agreed to a $1.3 billion bailout loan package, partly funded by the local government, to cover its mounting debts.

At that time, restrictions on capital withdrawal from China and the Covid-19 pandemic led to the club selling Romelu Lukaku and Achraf Hakimi, and parting ways with coach Antonio Conte shortly after winning Serie A. Last season, Inter reported a loss of $150 million, a year after a record loss of $265 million due to stadium closures during Covid-19.

Chairman Steven Zhang worries before an Inter Champions League match this season. Photo: Inter.it — Chairman Steven Zhang worries before an Inter Champions League match this season. Photo: *Inter.it*

In addition, Inter are seeking to repay a $294 million emergency loan – from investment fund Oaktree Capital, with a reported interest rate of 10% – taken out by Chinese owners Suning two years ago.

In total, Inter must pay Oaktree Capital around $400 million in full within the next year. Otherwise, the club could be acquired by Oaktree in a "foreclosure" similar to the way the Elliott Fund, a fund of American tycoons, acquired AC Milan from Chinese businessman Li Yonghong in 2018.

"Repaying the debt at the interest rate Inter is paying Oaktree is unsustainable," former Inter general director Ernesto Paolillo said in May. "Inter's current chairman Steven Zhang will not be able to draw capital from the parent group in China and will also not be able to cover the debt with other resources. Zhang will have no choice but to default on the deal and sell the club."

This season, Inter spent several months without a shirt sponsor and lost a significant source of income after DigitalBits, a cryptocurrency company, failed to make an agreed payment of nearly $100 million.

The Italian side will have the Paramount+ logo as their main sponsor for the Champions League final, a last-minute deal worth $5 million. For the same fee, the Paramount brand will appear on the back of Inter’s jerseys next season.

Being in Istanbul, Türkiye today gives Inter a chance to earn some extra cash. If they beat Man City, they will pocket $22 million in prize money for winning the championship. If they finish second, Inter will only earn $17 million from the final. But this amount of money will only help Inter solve a small part of the financial problems that have become more serious over the past two years.

Hong Duy

Source link